Mastercard Implements New Regulations

May 19, 2023 | High Risk Merchant Account | Dustin

Updates in regulations are being implemented by Mastercard as it applies to merchants who provide a free billing trial or negative option – those assigned an MCC code of 5968 and classified as high risk merchants.

Effect come April of 2019, these new policies and regulations will impact how merchants are billing their customers in an effort to combat complaints about deceptive practices and encourage merchants to communicate more openly and honestly with customers.

Here’s a quick overview through Q&A of some of the changes MCC code 5968 merchants will see:

Q: How will merchants be required to register?

A: Acquirers must register merchants using negative option billing through the MRP to ensure compliance with new standards

Q: How will the onboarding process differ?

A: During the onboarding process, merchants must list all third-party service providers with access to cardholder data with Mastercard

Q: When do I start the billing the customer for their trial offer?

A: The trial period must begin on the date the product was received by the cardholder

Q: Do I need to contact my customers for any reason? And if so, when?

A: After the trial period ends and before a card is charged, merchants must contact cardholder and share the amount and date that will be charged

Q: What other major requirement changes have been made?

A: The merchant must obtain the cardholder’s explicit consent for the transaction amount before initiating an authorization request.  If authorization attempt is unsuccessful, the merchant must send the cardholder a receipt explaining reason for decline

Q: What changes have been made to cancellation policy requirements?

A: All eCommerce merchants must direct link their cancellation policy on their website. When merchants submit an authorization request for a recurring transaction, cardholder must be sent an email or text message receipt.

Q: Are there any follow up requirements to cancellations?

A: The receipt must include instructions how to cancel negative option billing. The merchant must send written confirmation to a cardholder when negative option billing plan is cancelled.

Still have questions about Mastercard’s new rules and regulations? PayKings is here to help you through this time and to provide answers to your questions.

Feel free to reach out to us today – we’re here for you.